Stock Market Analysis

Sunday, November 08, 2015

What Might Happen This Week...

The US market made another positive week last week, pretty much against my predictions over the past two weeks that the market should take a breather back down to the 30MA before it has energy to move any higher due to extreme short term overbought condition and a looming resistance zone on the new high level.

Last Friday's Jobs Report also increased the bearishness in the market with a huge huge better than expected reading that brought back the rate hike hammer over the heads of all investors. Yes, right now, investors don't want to see great numbers but just slow and steady ones that show the Feds there is no need to do anything to screw things up right now. However, that was not the case last Friday.

Looking at the weekly chart, we also see the S&P500 making a 6th Straight winning week last week. Almost everytime the SP-500 make 6 consecutive positive weeks, there was selling pressure in the two weeks that ensued. As such, the odds this week certainly favors to downside but its not the kind of downside which one should buy put options on but rather the kind of downside to accumulate call options on in preparation of the ensuing breakout. There will also not be any real heavyweight numbers this week, typical of every second week of the month. This is what I typically call a "digestion week" where investors carefully think about and digest the numbers released on the first week and engage in a largely technical form of investing and trading. Yes, I am now of the opinion that the market should be able to perform one last big bull leg before all hell breaks loose in 2016, just like every of the previous market crashes. But of course, getting in at this level is still something for gamblers to do. Investors should still stay on the sidelines and see if the market really do breakout before committing.

Of course, the uncertainty didn't stop me and my Master's Stock Options Picks Subscribers from making a quick one day 13.7% profit on EWZ call options. Not bad for a one day return, isn't it? (Join my Master's Stock Options Picks Program today and WIN!)

Market Crash Timer: YELLOW

For now, the US market turns short term neutral trend within an intermediate and primary neutral trend.

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